October 2012 has come and there is no sign of the lists containing all un-reregistered companies which had to be produced by the Regional Courts of Bulgaria. The lists were necessary for initiation of the compulsory company liquidation.
As solicitors who actively work in the company law area, we have tried many times to contact the courts and have asked when the lists will be available. Normally the chairman of the court couldn’t tell us anything in particular. In other words they didn’t know or even worse - they haven’t started making the lists at all.
Bad legislation delay company liquidation of un-reregistered companies
Beginning of October 2012 our concerns seem to have come true. A bill for amendment of the Commercial Register Act [in Bulgarian] is now being discussed in the Parliament. The amendments basically remove §5 para 4 of the Act, where the term 1 October 2012 has been set. This means that the state “wipes out” the tracks of badly drawn legislation and replaces it with more sensible one. I just wonder – why now? Why the amendments were introduced after the government saw that there were no lists at all?
The new ‘improved’ procedure for company liquidation
The new regulation provides a relatively clear procedure of how company owners, directors or company creditors can initiate voluntary liquidation before the compulsory one is started automatically. The new procedure is virtually turned in the opposite direction. Instead the courts to provide the lists to the Commercial Register, now the company owners/directors would be able to ask the Register to request the company file from the court. This means that the application for voluntary liquidation has to be submitted to the Commercial Register.
Would that delay the transfer of regulated properties to shareholders’ names?
Yes, unfortunately. The bill is not yet effective and the Parliament can introduce different wording for the articles. However it is almost sure that this will come into effect early next month. As we expect creating the application blank form will take a while, so realistically we can start with the voluntary liquidation in the beginning of 2013.